Bond Yields Rise as Oil Prices Swing, Slowing US Economy

Wall Street closed down on Friday as bond yields rose and oil prices swung. The S&P 500 fell 0.3% in afternoon trading, while the Dow Jones Industrial Average dropped by 246 points, or 0.5%. The Nasdaq composite also declined, dropping 0.2%.

The majority of stocks on Wall Street were down, with rising bond yields putting pressure on the market. The yield on the 10-year Treasury climbed to 5.00%, its highest level since 2023, after topping 5% earlier in the week for the first time this year.

Higher yields can slow down the economy by making borrowing more expensive and undercutting stock prices. They have been rising steadily since the COVID pandemic knocked them nearly to zero in 2020, accelerating recently due to stubbornly high inflation.

Inflation remains above 3% by various measures, worsened by higher oil prices caused by the war with Iran. The price of Brent crude briefly reached $110 early this week, up from around $70 in July, before dropping to $104.58, down 0.2% from the day before.

Rising oil prices have pushed gasoline prices to $4.47 per gallon, up from $3.20 a year ago, and diesel prices are at a record $6.45 per gallon, affecting shipping costs for goods such as groceries and clothing.